Are debt consolidation loans bad for your credit check?

Credit ReportWhat is a credit check?

A credit check represents a person’s creditworthiness. If a person is applying for credit, the lender will complete a credit check to examine the borrower’s credit rating. A credit check can also be requested if a person is applying for a new power account or even a new job.

A credit check includes any payment defaults recorded against a person including unpaid fines. A default can stay on a person’s credit check for five years. A credit check also includes how much a person has borrowed and from what financial organisation. New Zealand credit reporters are Veda, Dun & Bradstreet and Centrix.

Are debt consolidation loans bad for your credit check?

When a person applies for credit, it will show the amount and who the financial provider is on their credit file, even if the loan is approved or declined. If the person is declined from various financial providers, it will list all of the providers the person has applied too but not that it has been approved or declined.

Applying to many financial organisation can harm future credit and may reduce the person’s credit score. If a person only applies to one financial provider and the debt consolidation loan is approved, and the person is committed not to apply for more debt elsewhere in the near future the credit check should not be affected.

What does your credit check say?

Legally you have right to request information about your credit check. You can contact any of the credit reporters, and they can supply you with your free credit check record.

It is important to know what is on your credit check as it can affect your future borrowing. It is also important to request your free credit check from all three reporters because if one of the reports is incorrect, this may cause you from being declined for credit.  You can request the reporting company to correct your report but you will need to supply evidence.

Try our debt consolidation calculator to see how much you could afford or how much you could save with NZCU South.




Interest Rate



36 month(s)

Your repayments could be as low as*:

$0 per

0 Repayments
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* Please note the calculations provided are estimates only, and do not constitute a quote; actual rates, fees and repayments may differ from those shown here.

Home owner [or NZCU South mortgage customer] personal loan rates from 9.95% p.a. Non-home owner [or Non-mortgage customers] rates from 13.95% p.a. Important terms and conditions, including lending criteria, fees and charges apply.  Minimum loan value $5,000. Finance provided by Credit Union South, trading as NZCU South.  Other rates available on request.


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